Logistics Management

Composed by: Anum Arshia(08IN115)

Logistics Management

Role of Warehousing in logistics. Warehouse Functions & options. Strategic decisions in Warehousing(site, layout,

type, storage). Warehousing Strategies. Warehousing performance measures.

Logistics Management

Occupancy Productivity Inventory turns Operating costs Warehousing (Source of logistical competency)

Order Fulfillment Timely Shipments Damage free delivery Documentation

Logistics Management

Storage to Flow. Inventories at rest to inventories at motion. Switching facility rather than storage facility.
Because of the value of strategic storage was not well understood, warehouses were often considered necessary evils that added cost to the distribution process. Donald J. Bowersox

Logistics Management

A warehouse acts as a supporting function for logistics and

plays a key role in attaining the overall objectives of the firms logistical supply chain system. The performance of a warehouse is judged by its productivity and cost performance, to achieve objectives of customer satisfaction and lower cost of operation.

Logistics Management

One of the most important steps in the selection of a logistical network is deciding on a; Centralized warehouse system: it ensures tight control on inventories and can operate on economies of scale resulting in lower operating cost. Decentralized warehouse system: it operates with multiple distribution centres ensure the best services to the customers.

Logistics Management

Looking at the warehouse objectives of profit improvement through cost reduction and enhancing customer service level for gaining a competitive edge, the following needs to be taken care o f:
Maximum utilization of storage space(floor and cubic space) Higher labour productivity Maximum assets utilization Reduce material handling Reduce operating cost Increased inventory turnover

Logistics Management

A warehouse is a service function that plays a pivotal role in the supply chain of the company and it has the following functions;

Material Storage Function Material Handling Function Information Handling Function

Logistics Management

Material storage function

Since the manufacturing and consumption cycle never match, the manufactured material has to be stored somewhere till the demand for the same is generated and delivery is confirmed. The storage facilities are designed around the following functions. Hold Consolidation Break bulk Cross-Docking Mixing Postponement Packing

Logistics Management

Hold:
Finished goods warehouse
Manufacturing plant W a r eh o u s e (Finished goods) Customer

Consolidation:
Consolidation warehouse
Vendor 1 W a r eh o u s e (Finished goods) Buyer 1

Vendor 2

Buyer 2

Vendor 3

Buyer 3

Logistics Management

Break-Bulk:
Break-bulk warehouse
Manufacturing plant Break-bulk W a r eh o u s e Customer 1 Customer 2

Customer 3

Mixing:
Mixing warehouse
Plant A ( Ingredient 1) Plant B ( Ingredient 2) Plant C ( Ingredient 3) Mixing W a r eh o u s e Customer 1

Customer 2

Customer 3

Logistics Management

Material handling function

The handling function is designed around the following functions.
Loading and Unloading Material Movement ( To and From the Storage Area) Order Filling

Logistics Management

Information handling function

Information is required on the following: Goods inwards Inspection and auditing Goods outwards Stock outs Excess stocks Invoicing Warehouse expenses Information is the power and it helps in taking a speedy decision in a highly competitive environment for building a competitive edge over the rival. Hence, a proper warehouse information system can considerably enhance the quality of customer service to both internal and external customers of the organization leading to customer satisfaction.

Logistics Management

Private Warehouse Public Warehouse Contract Warehouse

Logistics Management

Private Investment Flexibility in Cost per unit stored Levels of controls Adequacy of goods stored Risk High Material handling, storage and throughput planning Inversely related to volumes High High Due to change in market demand or consumption centres

Public None Location Low Low Low Minimal

Contract Very little Location Inversely related to volumes Medium High Minimal

Logistics Management

The following are some warehouse trends for the next century:
Focusing on the customer Compression of operations and time Continuous flow Cross-docking Electronic transactions
Customized warehousing Third-party warehousing The incredible shrinking order Automation The human factor

Logistics Management

The considerations of warehouse site selection revolve around two major factors; Service Cost The other factors affecting site selection are: Availability Infrastructure Product Market Regulations Access Local levies Primary transportation cost

Logistics Management

The evaluation of alternative layouts of a warehouse is done based on the following guidelines normally followed in an industry: Item turnover Space utilization Product configuration Product characteristics Good housekeeping Safety and security

Product Type Solid Liquid Gases

Product Characteristics Value density Logistical reach Perishability Hazardous

Objectives Cost reduction Stock turnover Customer Productivity

Resources Finance System Competency

Warehouse Network(Numbers & Locations) Private Public Contract

Warehouse Facility Planning Decision Strategic Layout Handling equipment Storage scheme Tactical Storage allocation Order picking Packing Operational Work allocation Job scheduling Performance monitoring

Logistics Management

The elements of warehousing cost normally accounted for are; Transportation. Storage. Administration. The inventory carrying cost is not included in warehousing cost. The warehousing cost includes; Fixed cost elements. Variable cost elements.

Logistics Management

Warehousing network plays a major role in the success of the physical distribution of products. It is observed that the leading firms adopt and implement the following warehousing strategies;
Capacity Switching. Hub Networking. Cobbling. Outsourcing.

Logistics Management

The concept of virtual warehousing surfaced due to emerging

networking and communication technologies in the 1980s. It is defined as a single storage system located at a convenient place to take care of worldwide requirements of products and services. The concept is still in its early stages of development and application.

Logistics Management

Majority of the firms do not give importance to warehousing

operations. A warehouse is treated as a place for storage of goods till they are shipped. Hence, it is wiser for the warehouse management to have a charter to avoid errors, perform better and meet customer satisfaction. A warehouse is a strategic link in the customer_value chain, it has an important role to play, which may be performed with clear-cut guidelines in the form of warehouse charter.

Logistics Management

The most common parameters that indicate the efficiency and effectiveness of warehouse operations are discussed below;
Stock Turn-Over Ratio Warehouse Cost-to-Sales Ratio Warehouse Cost per Unit Handled Occupancy Rate of Warehouse Space

Logistics Management